The year 2022 has proven to be yet another transformative time across the healthcare sector, as is the norm for most industries still reeling from the impact of a lingering global pandemic. The healthcare sector, specifically, has been both revolutionized with astounding scientific and technological innovation, as well as woefully interrupted by challenging economic realities and market downturn.
As business priorities continue to shift and specialized talent requisites evolve in turn, our dedicated team of executive recruitment experts at Klein Hersh has remained focused on meeting our partners exactly where they are, each step of the way, through this ever-changing, shared journey.
Year-end always provides an important opportunity to reflect on the state of the industry, recognize our individual and collective achievements, and consider what the future holds for the healthcare sector and the client partners we serve. As we move forward into the knowns and unknowns together, we sat down with several of our firm’s practice leaders to garner their perspectives on some of the most prominent themes of the year that was, and what we should anticipate in 2023. Following is our take on five top trends.
1. PE and VC Investments in the Healthcare Sector
Looking back to 2020 and 2021, the healthcare industry experienced banner years with unprecedented investments made by private equity (PE) and venture capital (VC) firms. Never before was so much attention paid in this complex space, and massive funding poured into the smartest, fastest, leanest companies across the industry. This trend shifted coming into the second half of 2022.
“There was nothing like the fever pitch of healthcare investment we witnessed in 2021 and of course, this ferocity of funding pulled back in 2022 amid an economic downturn,” says Josh Albert, Managing Director and Chief Development Officer, Klein Hersh. “This meant companies looking to advance healthcare needed to prove mightily just how smart they could be with their resources throughout the entire innovation lifecycle.”
Albert advises, “As we move into 2023, it will be imperative for healthcare companies to be as cleverly innovative as possible in propelling science forward. This is particularly challenging news for those companies advancing therapies for some of the most difficult to treat diseases, where there are truly unmet needs, and patients and loved ones are urgently waiting for hope. It’s here that the most groundbreaking work needs to occur. Our team is more committed than ever to ascertain the most preeminent experts who can deliver on critical goals.”
Albert predicts 2023 will see a continued influx of new companies bursting onto the scene, and more and more first-time chief executive officers (CEOs), chief scientific officers (CSOs), chief medical officers (CMOs), and other executives being hired into some of the most innovative and potentially transformative startup companies in the US, as well as abroad. He says the supreme shortage of talent will continue to be the headline, as will the rapid ascension for top performers.
2. Career Aspirations of Top Talent
As smaller biotech companies face increasing financial pressure to perform, we have seen an uptick in top talent leaning back toward roles with mid-size to large pharmaceutical companies for greater stability. Jeff Azarva, Client Partner, Physician Recruitment at Klein Hersh, relays that for the first time in nearly eight years since he joined the firm, he’s observed a substantial number of candidates who had previously made the jump to emerging biotech companies, or aspired to do so, begin to rethink their strategy.
“It’s no secret that this past year was one of the most challenging for the biotech sector in recent memory, riddled by significant funding challenges and subsequently, market volatility,” says Azarva. “We saw a lot of people decide to take a U-turn in their career trajectory, returning to mid-size and big companies as they sought higher ground in weathering out the biotech storm of 2022.”
Azarva explains that going into 2023, this will be one of the most formidable challenges faced by smaller companies in recruiting top talent, as candidates will no longer be enticed only by compelling science. Foremost in their minds is the question of sufficient financial viability, infrastructure, and risk assessment in start-ups that are now considered higher risk than before.
“These companies will need to wrestle with some hard decisions, such as downsizing and pipeline reprioritization to extend their financial runways,” he says. “They’ll need to think creatively about how to access capital in a challenging macroeconomic environment. During this turbulent time, countless candidates and client partners have turned to us as a valued partner and sounding board to help guide them in their individual career decisions, as well as in their corporate strategy and hiring plans.”
3. The War for Talent in the Translational Science Space
Translational science―the process of turning observations in the laboratory, clinic, and community into interventions that improve the health of individuals and the public at large―has become foundational to the success of both new and more established pharmaceutical and biotechnology organizations. As these companies forge ahead in this space, which spans from diagnostics and therapeutics to medical procedures and behavioral changes, they are all fiercely vying for an already constrained pool of talent.
“With business units and new companies dedicated to this area of science exploding into the marketplace, talent that brings translational expertise in the drug development lifecycle has been, and will continue to be, in the very highest of demand,” explains Allison Greenfield, Client Partner, Discovery and Development, Klein Hersh. “We are constantly scanning the priorities of our industry partners and evaluating overall movement in the market, as well as the personal and professional shifts among our vast network, to capitalize on the right opportunities at the right time.”
Greenfield predicts the war for talent in translational science will not only continue throughout 2023, but will become even more intense.
4. The Impact of Scientific Advancements on the Regulatory Process
Leading drug development headlines in 2022 are a myriad of innovative therapeutics that target specific diseases and biomarkers, further opening the gateway to precision medicine. Hand-in-hand comes the bright spotlight now shining on the regulatory framework that can facilitate or hinder the speed of discovery and approval. Nowhere is this more evident than in the lightspeed timeline of vaccine and treatment in the development for COVID-19.
“We’ve seen tremendous strides within pharma and biotech to unravel the science behind diseases, enabling the ability to create specific therapeutic discoveries targeting disease-associated biomarkers,” shares Matt Taitelman, Client Partner, Physician Recruitment, Klein Hersh. “Today’s clinical trials are being conducted in new ways, with approaches grounded in technological advances largely stemming from the pandemic. Of course, these advancements are forcing an updated look at how the safety and efficacy of new drugs are evaluated.
Taitelman explains that in 2022, the U.S. Food and Drug Administration (FDA) granted several approvals for new medicines based on biomarker data alone, which is largely unprecedented. Extraordinary advancements in scientific understanding, new methods of data gathering and sharing, the availability of artificial technology, and the application of real-world evidence throughout the ongoing drug development and approval process, is indelibly changing the landscape of clinical trials forever.
What the regulatory process will look like in 2023 and beyond remains unknown, but surely, change is in the air.
5. The Power of Corporate Culture, Diversity, Equity, and Inclusion
While diversity, equity, and inclusion (DEI) are critical components in every search we conduct and the buildout of any successful team, the specific hiring of internal human resources (HR) leaders has traditionally been reserved for more established healthcare companies. More recently, smaller and newer companies are clearly signaling not only the value, but the necessity, of strong HR leadership.
“Bringing on internal chief people officers (CPOs) and chief human resources officers (CHROs) has been a priority for more established healthcare companies for some time,” observes Klein Hersh’s Michael Leonard, Client Partner, Healthcare. “The biggest trend of late is the emergence of earlier stage healthcare companies―even Series A- and Series B-backed companies―establishing these positions from the get-go.”
Leonard cites several reasons for the shift. First, in the post-pandemic world we now live in, as companies navigate the pros and cons of hybrid, remote, and fully onsite work, the ability to define, establish, and maintain a healthy corporate culture has become more elusive. Yet, with the ever-heightening quest to attract and retain the best talent, the ability to deliver exceptional corporate culture is more paramount than ever.
Says Leonard, “DEI has clearly come front and center in all of our searches, but more recently, newer healthcare companies are starting strong with diversity as a top priority, along with innovative strategies to attract and retain talent in a competitive marketplace. We’ve seen a tremendous uptick in hiring CHROs and CPOs who can carefully consider overall strategies, and ensure people-first priorities and incentives. In 2023 and beyond, there’s no question this trend will continue to grow exponentially.”
A Nod to the Year That Was
As we reflect on 2022 and consider our priorities for 2023, we would be remiss in not taking this moment to reflect on some of our own accomplishments. There is much to be proud of and much to look forward to.
Over this past year, Klein Hersh served our client partners with over 600 new executive hires. More than 40 percent of those hires represent individuals from diverse backgrounds.
We added to our own team four new hires―exceptional individuals who will help us continue to excel in meeting and exceeding the expectations of our client partners. On a personal note, we also welcomed six newborns to the Klein Hersh family!
We opened a new office location in Center City Philadelphia to complement our existing―and recently remodeled―office in suburban Horsham, Pennsylvania, to enhance the convenience factor for various interactions and meetings.
Our team continued to volunteer our time and contribute financially to several charitable organizations that mean a great deal to us, including the Ronald McDonald House in Philadelphia, Big Brothers, Life Science Cares, and Planned Parenthood.
And in April 2022, we completed an extraordinary new structure for our firm, creating an Employee Stock Ownership Plan (ESOP) that means Klein Hersh is now 100 percent-owned by the members of our team. Among numerous benefits, this ensures our firm is in the best possible hands far into the future.
“The secret sauce at Klein Hersh has always been our in-house subject matter expertise, extensive relationships, layered alongside our unmatched grit to bring forward the best of the best,” states Jason Hersh, Chief Executive Officer, Managing Partner, and Co-founder of Klein Hersh. “We couldn’t be more excited about everything our team has accomplished in 2022―from building out full leadership teams at some of the most cutting-edge healthcare companies, to placing c-suites at some of the most long-trusted pharma and biotech companies. There is so much more to look forward to in 2023 and beyond, and we’re ready to embrace all that the new year has in store for our firm, our client partners, and the healthcare industry. It’s our privilege to serve you.”
To watch more of the interviews, please visit: https://www.youtube.com/watch?v=H-AjtsJcySk&t=15s